St. Paul officials are high-fiving this week because, with the help of some public assistance, an important employer is committing to stay in town.
It’s the Gerdau steel plant, not the Vikings.
Gerdau, which is based in Brazil and has plants around the world is putting $50 million of its own money into major equipment improvements, while the St. Paul Port Authority is kicking in a $500,000 forgivable loan (if the company keeps 330 workers through 2015) and there’s a $250,000 state foregivable loan in the works. Xcel Energy is also giving a break on electric rates.
So the proportion of Gerdau’s contribution to its public subsidies is far, far greater than the Vikings’ proposed contribution (which is going to be just over half of the $1 billion price tag, or even less than that, depending on the conference committee).
Gerdau is going to put new continuous casting steel-making equipment in the plant, near Hwy. 61 south of downtown. Without the big new investment, there’s a good chance that the plant would have closed in coming years, eliminating those 300+ jobs, said Cecile Bedor, the city’s director of Planning & Economic Development.
“They were deciding which plant in the U.S. would get the new equipment and if it didn’t happen here, I think the plant would no longer have been competitive and it could have close within five to 10 years,” she said.
Bedor credited a full-blown effort by many agencies in getting the investment. She said the city, the Port Authority, the St. Paul Area Chamber, Greater MSP, the state Chamber, the state’s DEED and Xcel Energy worked hard, as a group, to pull the pieces together.
“We realized that we all had a little something to offer, and that as a region we could work together to get them to make the investment here,” she said.
Officials expect the equipment changeover to start soon and be finished by 2014.
Two Cities blog, which covers Minneapolis and St. Paul City Halls, is made possible in part by grants from The Saint Paul Foundation and the Carolyn Foundation.